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Pinnancle buys more of Centrafin
Shareholders were advised that Pinnacle entered into a sale of shares agreement on 28 July 2011 ("the agreement"), whereby CGI will dispose of its 39.2% stake in Centrafin ("the sale shares") to Pinnacle for a total purchase price of R11 350 000 ("the purchase price") subject to the fulfilment of the suspensive condition set out below ("the transaction"). The effective date shall be 30 June 2011 ("the effective date") provided that the suspensive condition set out below is fulfilled.
The business of Centrafin is the provision of medium term financing solutions to both commercial and public sector entities for the acquisition of information and communication technology and allied products both from the Pinnacle Group and from third parties. Pinnacle already owns 51% of Centrafin. The remaining 9.8% is owned by Ms J S Gill, the current managing director of Centrafin, who has waived her pre-emptive right to purchase the sale shares.
Salient terms
In terms of the agreement, CGI shall dispose of all 39.2% of the issued ordinary share capital in Centrafin held by it to Pinnacle for the purchase price. Pinnacle shall make payment of the purchase price to CGI in cash within two business days of when the suspensive condition detailed below has been fulfilled.
Suspensive condition
All suspensive conditions have been fulfilled, save for the transaction still being subject to the fulfilment of the following unfulfilled suspensive condition:
Compliance by 31 August 2011, or such later date as the parties may agree, with the JSE Ltd ("JSE") Listings Requirements and any other regulations issued by the JSE from time to time, including but not limited to Pinnacle obtaining a fairness opinion on the transaction from a JSE approved service provider in a form acceptable to the JSE.
Pro forma financial effects
The pro forma financial effects of the transaction on Pinnacle's financial results for the six months ended 31 December 2010 are not significant.
Independent Opinion
The Pinnacle board of directors has appointed Mazars Corporate Finance (Pty) Ltd, an independent expert to provide the company with a fairness opinion on the transaction. The appointment of the independent expert has been approved by the JSE the independent expert has issued a fairness opinion which is currently with the JSE for their approval.
Small related party transaction
CGI is a material shareholder in Centrafin. The purchase price is 0.75% of the market capitalisation of Pinnacle calculated as at close of business on 28 July 2011 and therefore the transaction is classified to be a small related party transaction in terms of Section 10.7 of the Listings Requirements of the JSE.
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Pinnacle -- acquisition of Datanet stake
Shareholders are advised that Pinnacle has entered into a sale of shares agreement ("the agreement") whereby the sellers will dispose of their 40% stake in Datanet ("the sale shares") and their loan accounts in Datanet to Pinnacle for a total purchase price of R16 800 000 ("the purchase price") subject to the fulfilment of the suspensive conditions set out below ("the transaction").
The effective date shall be the date upon which all the suspensive conditions detailed below have been fulfilled or waived, as the case may be ("the effective date"). The business of Datanet is the distribution of copper, fibre, wireless and related information and communications technology ("ICT") network hardware and allied infrastructure. Pinnacle already owns 60% of Datanet.
Salient dates
In terms of the agreement, the sellers shall dispose of 40% of the issued ordinary share capital in Datanet held by them together with their loan accounts in Datanet to Pinnacle for the purchase price. Pinnacle shall make payment of the purchase price to the sellers in the form of 2 000 000 ordinary shares in Pinnacle at a price of R8.40 per share on the date on which all of the suspensive conditions detailed below have been fulfilled or waived, as the case may be. The purchase price will be settled as follows:
The Lello Trust:
1 255 000 Pinnacle ordinary shares at a price of R8.40 per Pinnacle share for 251 000 ordinary shares in Datanet representing 25.1% of Datanet's issued share capital, being The Lello Trust's portion of the sale shares plus the full balance of the loan accounts due by Datanet to David Roydon Lello ("Lello") and/or The Lello Trust as at the effective date.
Pronk: 745 000 Pinnacle ordinary shares at a price of R8.40 per Pinnacle share for 149 000 ordinary shares in Datanet representing 14.9% of Datanet's issued share capital, being Pronk's portion of the Sale Shares plus the full balance of the loan account due by Datanet to Pronk as at the effective date.
A material condition of the transaction is that Pronk enters into an employment contract with Datanet in which he will be employed as an executive director of Datanet for a fixed non-cancellable period of 24 months. Lello has resigned his position as managing director and will enter into a contract under which he will remain as a non-executive director for a period of 12 months. All parties have complied with these conditions.
Suspensive conditions
All suspensive conditions have been fulfilled, save for the transaction still being subject to the fulfilment of the following unfulfilled suspensive conditions:
- the formal approval of the Transaction by the trustees of The Lello Trust in accordance with the trust deed of The Lello Trust initially by 30 June 2011, but extended by the parties to 8 July 2011; and
- compliance with the JSE Ltd ("JSE") Listings Requirements and any other regulations issued by the JSE from time to time, including but not limited to Pinnacle obtaining a fairness opinion from a JSE-approved service provider by 7 July 2011 or such later date as is agreed by the parties.
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| Closing price data source: JSE Ltd. All other statistics calculated by ProfileData. |
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